CHAPTER 5 OPTION PRICING THEORY AND MODELS

Equity (stock) Options Flashcards | Quizlet

The adjusted closing price for the stock would then be $18.50 ($20-$1.50). If XYZ Corp. announces a 2:1 stock dividend instead of a cash dividend, the adjusted closing price calculation will change. A 2:1 stock dividend means that for every share an investor owns, he or she will receive two more shares.